Investors Expect the Fed Interest Rate Decision

The US currency strengthened against the basket of major currencies. The US dollar was supported by the CB consumer confidence index published yesterday, the value of which counted to 127.4 in July, while experts expected 126.5. It has also become known that the US and China intend to repeat negotiations in order to avoid a trade war. The US dollar index (#DX) closed yesterday in the positive zone (+0.23%). Today, investors took a wait-and-see position before the Fed meeting. It is expected that the regulator will leave the interest rate unchanged at 2.00%.

Yesterday, important economic statistics were also published in the Eurozone and Canada. Thus, the number of unemployed in Germany reduced by 6K, while experts expected a decrease by 10K. The consumer price index in the Eurozone counted to 2.1% and was above the forecasted value of 2.0%. However, GDP (year-on-year) slowed down to 2.1% instead of 2.2%. The indicator of Canada GDP increased to 0.5% in May, although investors forecasted a value of 0.3%.

Today during the Asian trading session, a report on employment change (q/q) in New Zealand has been published. The value counted to 0.5% and was above the forecasted value of 0.4%. However, the unemployment rate in New Zealand rose to 4.5% in the second quarter instead of 4.4%. In China, the index of economic activity in the manufacturing sector from Caixin was published, which counted to 50.8 in July, while investors forecasted a value of 50.9.

The "black gold" prices are declining due to the increase in supply. At the moment, futures for the WTI crude oil are testing a mark of $68.10 per barrel. At 17:30 (GMT+3:00), a report on the US crude oil inventories will be published.

Market Indicators

Yesterday, the bullish sentiment was observed in the US stock market: #SPY (+0.49%), #DIA (+0.51%), #QQQ (+0.77%).

At the moment, the 10-year US government bonds yield is at the level of 2.96-2.97%.

- The index of economic activity in the manufacturing sector in Germany at 10:55 (GMT+3:00);
- The index of economic activity in the UK manufacturing sector at 11:30 (GMT+3:00);
- ADP nonfarm employment change at 15:15 (GMT+3:00);
- The index of economic activity in the US manufacturing sector from ISM at 17:00 (GMT+3:00);
- Fed interest rate decision at 21:00 (GMT+3:00).

by JMarkets, 2018.08.01

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.